Private Hire firms stop trading since fee hikes

2nd February 2018

New figures have shown almost fifty Private Hire Operators have closed their doors since the 5000% rise in license fee’s by Transport for London was introduced.

The Licensed Private Hire Car Association (LPHCA), which campaigned to get Private Hire Vehicles (minicabs and chauffeurs) in London licensed, will challenge Transport for London (TfL) in the High Court next week (6th February).

It has brought about judicial review proceedings for what it sees as punitive and unfair increases in the cost of Licensed Operator Fees.

A freedom of information request to TfL has shown that in September 2017, when the new fees were approved, there were 2,445 PHV Operators licensed. By 3 December 2017, there were just 2,399. TfL has stated that it needs to increase costs to meet operator licensing, compliance and enforcement costs.

Steve Wright Chair of the LPHCA says: “I have spent all my working life seeking to improve standards and safety in London. TfL’s own figures show there are fantastic levels of compliance because Operators in London have been regulated for over 15 years. We are concerned that monies raised by these increases will not be used for Operator compliance but be used elsewhere by TfL.’

He added; “We are taking legal action ‘more in sorrow than in anger’. What we hope is that the High Court will rule in our favour and that TfL will engage with us and other key trade bodies to discuss fees that are realistic, affordable and proportionate to the cost of running its compliance and enforcement function.”

TfL’s own figures show that the most compliant medium-sized operators are being subjected to punitive costs. Some long-established minicab companies have seen the cost of a five-year licence escalate from £2,826 to £30,000. By simply adding one vehicle, their costs would rise to £150,000. The addition of one driver would take them into a higher tier and cost the company £54,000 at the point of licence change.

A TfL spokeswoman told Evening Standard that the number of businesses closing was “fairly consistent” with recent years.

She said the fee rises were “proportionate” after a dramatic rise in the size of the industry over the last five years had greatly increased the costs of overseeing them. The fees will fund extra compliance officers “who do a crucial job in driving up standards and ensuring passengers remain safe”.

The case will be considered on various aspects including the allegation that TfL did not undertake a considered and thorough consultation prior to the introduction of these fees and failed to carry out an independent regulatory impact assessment.